The Central Bank has warned that the Irish funds industry needs to do more to tackle the risk of money laundering and terrorist financing.

Officials in Dame Street said that while satisfactory process and controls were found in some areas, the nature and number of issues identified suggest more work needs to be done by firms in Ireland to manage the money laundering and terrorist financing risk.

The Central Bank yesterday published a report following a number of on-site inspections carried out by officials over the course of last year, and off-site requests for information.

Domhnall Cullinan, the Central Bank's head of Anti-Money Laundering, said the Irish funds industry was a significant part of the financial services sector.

"Any business with such a large variety and amount of customers, high values and volumes of transactions and a cross-border nature is attractive for money laundering/terrorist financing," he said.

"The Central Bank acknowledges that many firms had responded positively to previous Central Bank communications but, as the report identifies, more work is required by firms in Ireland to effectively manage money laundering/terrorist financing risk.

"The Central Bank expects all funds and fund service providers to carefully consider the issues raised in the report."

The bank noted a number of issues, including weaknesses in reporting suspicious transactions, and the record keeping associated with these reports.

Evidence

It also noted that there was insufficient evidence of effective ongoing monitoring of investor transactions.

The Irish Independent reported in July that Financial Regulator Cyril Roux had flagged concerns in October of last year that the Central Bank's supervision of anti-money laundering activities was "woefully insufficient".

He blamed a lack of staff for the bank's apparent inability to properly supervise anti-money laundering activities.

The Central Bank, however, told the Irish Independent that since then, staffing in the Anti-Money Laundering Division had risen by 27pc.